GameStop CEO Ryan Cohen has made an unsolicited offer to acquire eBay for approximately $56 billion, as reported by The Wall Street Journal. Cohen believes there is a strong opportunity to transform eBay into a much larger competitor to Amazon.
Offer Details and Stake Build-Up
According to the report, the offer includes a mix of cash and stock and comes as GameStop builds a stake in eBay. GameStop has accumulated about a 5% stake in eBay and is offering $125 per share, representing a roughly 20% premium over eBay's previous closing price. Cohen stated that GameStop has secured a commitment letter from TD Bank for up to $20 billion in debt financing to support the deal. The company also holds around $9 billion in cash, though the full financing structure remains unclear. GameStop has formally sent an offer letter to eBay's chairman, outlining the proposal and its plans.
Cohen's Vision for eBay
Cohen expressed confidence in his ability to lead eBay, citing his experience at GameStop and Chewy. He emphasized that combining GameStop and eBay could help reduce costs and improve earnings, particularly in overlapping areas like collectibles and trading cards. Cohen suggested that GameStop's physical stores could support eBay's online marketplace by assisting with item collection and verification. He also advocated for eBay to expand into live commerce, where products are sold through real-time video streams. "It could be a legit competitor to Amazon," Cohen said about eBay.
Potential Challenges
The Wall Street Journal report notes that the deal would be difficult to complete, as GameStop is much smaller than eBay. GameStop is valued at around $12 billion, while eBay is valued at about $46 billion. Some analysts have raised concerns, noting that eBay has recently reported strong results and is already improving its business. "Why disrupt things? The turnaround is working," analysts said in a note cited in the report.
Cohen remains undeterred, stating that he is prepared to take the proposal directly to shareholders if eBay does not respond positively. "EBay should be worth—and will be worth—a lot more money," Cohen told the publication. "I'm thinking about turning eBay into something worth hundreds of billions of dollars."
